Mr MacGregor and Ms Austwick, thank you for coming here and opening our inquiry. We invite you to make an opening statement.

(Mr MacGregor) The British Museum is, I think, one of the great ideals made reality by Parliament. The decision in 1753 by Parliament to create a museum where any curious person/any studious person from anywhere in the world would be able to examine, free of charge, the artefacts and the natural history of the world set a model and a standard that the rest of the world has pondered. The idea of the universal museum, the national museum, in both cases, was the first around the world. In that ideal, the Museum has remained absolutely constant. The purpose today is as it always was, that any visitor should be able to explore the whole world and every place in it. In terms of the collection, the Museum is now more able to do that than it ever was and it has always been the central part of the purpose of the Museum that, as well as looking at objects, visitors should be able to read and find out about them. So although the library is no longer there, we still have a library on the collection and of course we have a website information of great extent on the collection. We never felt that we could achieve the purpose of allowing the entire population to explore the world other than through free admission, that no barrier should be put to one visit and repeat visits and that everybody should know that this collection belongs to them for them to explore as they choose. We believe that it is because of free admission over two-and-a-half centuries that we now have the happy position, I think, for a worldwide museum. Fifty-five per cent of our visitors are international, only 45 per cent from the UK. Within our UK visitors, 45 per cent are from London, 55 per cent are from the rest of the UK, and, within our British visitors, the declared non-white British visitors form 13 per cent of British visitors and our C1 category visitors is 36 per cent and our C2, D and E 14 per cent. We believe that breakdown is the result of, as I say, two-and-a-half centuries of free admission and we hope we will be enabled, through Government funding, to extend the reach and the purpose of the Museum. We have inherited, all of us, an absolutely unique resource in the British Museum. We have in place many programmes and many activities to make that resource available to the world and especially to the whole of the UK. The great challenge for us, I think, is to found the financial resources to allow the Museum to become really the Museum of the entire nation and the world.

Michael Fabricant

You have received a small increase in funding from the Department via the Treasury, but it is only a small increase and, in your written evidence to us, you tell of the difficulties that the British Museum faces. You will be aware that a Treasury spokesman told The Sunday Times in its publication on 13 October that the reason for this is and I quote, AThe Treasury awards excellence, not incompetence.@ Have you been incompetent?

(Mr MacGregor) I do not think it is fair to say that the British Museum has been incompetent. The British Museum has faced over the last ten years a challenge really equalled by no other museum: the withdrawal of the British Library and the evacuation of those spaces and the need to transform the reading room of the Great Court while keeping the entire collection open to the public. As I say, that is a challenge that no other museum has addressed. The effort has led to many difficulties in the museum. All administrative and all financial resource had to be put to achieving that end. It has been achieved; I think it has been magnificently achieved. The result is that we have a backlog of building work to be done on the rest of the building, we have the rest of the British Museum spaces to develop and we have to refocus the administrative work in the administrative roles of the Museum to the tasks ahead. I think the Treasury was unduly harsh in the way it judged an institution coping with such an enormous task.

I noticed in the allocation being made this year that there has been simply a transfer of around ,400,000 from your resource allocation, which are your ongoing costs, to your capital costs. Given that you now know what the capital and resource allocations are going to be for the next three years, are you going to be able to operate within those budgets?

(Mr MacGregor) Obviously the Museum can operate on any budget that it has. That is our job. The question is, can we operate effectively to the maximum public benefit and I think the answer has to be, sadly, Ano@. Our first task, once the collection is safely conserved and stored, obviously is to make it available to the pubic in as many ways as possible. The need for security in galleries that are open to the pubic is evident and the ,400,000 will certainly be very helpful in that area but it is only there for one year and then it is absorbed. What it does not take into account are the two major developments. Firstly, the Treasure Act has laid new obligations on the Museum by statute. We have had to create about ten new posts to meet those obligations, which are very important and which we have been very happy to meet, but only one of those posts has been funded and, in a recent debate in the House of Lords, Lady Blackstone said that it was for the Museum to allocate its resources in accordance with its statutory obligations. It is hard to meet those new obligations without repercussions elsewhere. Secondly, we have a very ambitious and extensive programme for different communities in London and across the country. Those require resources and staff above all. You cannot have those programmes without the staff and it is very hard to see whether or not we will be able to achieve those programmes on the funding as announced at the moment.

Finally, you said that you do not think you will be able to operate effectively and you have given the reasons why. What would be the practical effects over the next two or three years? In which ways will the British Museum not be able to perform the sort of things that you would like to see it perform?

(Mr MacGregor) I think it will be less able to reach the public outside London above all, which is obviously the main concern. I think that will be the major area where the British public will notice the result of under funding.

And that is it?

(Mr MacGregor) That is the major area. I am not talking about capital, I am not talking about redeveloping the building, all those things will remain evident, but it is easier for us to try and raise other funds for those.

I hasten to add that when I said AAnd that is it?@, I was not implying that people from Manchester nor indeed Lichfield should not be accessed by the British Museum.

(Mr MacGregor) No.

Mr Bryant

Many congratulations on your new job. What is the difference between running the National Gallery and running the British Museum?

(Mr MacGregor) There are two main differences. Firstly, the National Gallery is a collection of one aspect of European tradition and the British Museum is the place where the world can discover the world. The scale of the ambition of the collection is quite admirable. There is no other building in the world where anybody can come and explore both their own culture and how it fits into every other culture in the way they can. That is the first difference. It is a quite different ambition. The second difference is that the National Gallery had been well-funded to achieve its purposes and properly funded, and it is perfectly clear to me that the British Museum has not been over the last ten years and is not adequately funded to make of the collection what the public want to make of it.

Between the lines and from your original comment and quote from the original founding document of the British Museum about Aany curious person@ - the concept of a curious person entering the British Museum strikes a sense of trembling - I just wonder whether with the hotch-potch that is the other side of what you have just described that is the British Museum, which might, say, be full of a lot of knick-knacks, very wonderful knick-knacks though they may be, there is too great an ambition in there?

(Mr MacGregor) No. It is not a hotch-potch, it is the story of humanity. It is the memory of mankind that you cannot reach anywhere else. In the objects preserved in the British Museum is the collective memory of mankind. The great challenge is to make the collection physically visitable so that the coherence of the collection, the oneness, the secret of oneness of humanity, becomes apparent. That is why capital in the future is so important. With the withdrawal of the British Library and the spaces available, we are the first generation that can really think how this extraordinary collection can be employed.

I used to spend a lot of time writing books in the old library and was delighted when it went because I think all the staff who worked there hated working in that confined, cramped cabin space - it was miserable - and now you have created a stunningly beautiful atrium or whatever you want to call it, but I do feel, especially when you go upstairs in the British Museum, that the sense of oneness is not, it is a sense of hotch-potch: there is a bit of this and there is a bit of that. I think one of the most beautiful things that you have is some of the Assyrian Collection that you have which is truly stunning and is not available anywhere else in the world and, if it was in Assyria, would have probably been destroyed by now. Before you get more money, I want to know what the British Museum is there for.

(Mr MacGregor) The British Museum is to enable everybody to understand the history of the world and how they relate. The relationship between Assyria, where civilisation began in the Western sense, and Egypt and Greece can be seen in the British Museum as nowhere else in the world and, on the ground floor - and our task is to make it more open - how the Greek achievement then informs Rome and what happens in India. That is what you can understand from the British Museum. There is no such thing really as a separate culture.

I am sorry to interrupt you but you are making yourselves a sort of world service of museums.

(Mr MacGregor) No other museum can do this and the British Museum has to do what its collection is uniquely allowed to do. It was set up to be the world service. It was always set up to be the universal museum. Of course, there are inevitably many narratives within a collection, many, many narratives, but you are quite right, the key at the moment of redoing the upper floor, which is indeed what we plan to do now that the building of the Great Court Room has been undertaken, is to make more of the links between the different civilisations.

One question about money. I was in the Prado last week in Madrid and the Prado is free to Spaniards but you pay if you are from any other country. The Louvre has a similar arrangement. There are a number of countries in the world where the major galleries of the world are either free all through the week or on particular days for their nationalities. Do you think there might be value in exploring having a free charging policy for the United Kingdom but paying for external visitors?

(Mr MacGregor) I think the Prado has had to abandon that policy when Spain joined the European Union.

You do have to pay. Last Saturday I paid.

(Mr MacGregor) You are not allowed in any European country to distinguish between nationals and other members of the European Union. I may be wrong. The evidence I think from all the other European major museums is that, since charges were applied - it was all free until somewhere in the twentieth century - the proportion of local visitors as opposed to foreigners has declined and the social balance of the visitors has moved in a way one would not want if one sees museums as part of an educational system. I think the fact that we still have such an enormously high proportion of UK visitors, particularly London visitors, to all our public collections has a great deal to do with free admission.

Chairman

It would be interesting if we could, say, get the House of Commons Library to give us some information about different forms of concession over the European Union. I was in Italy last year and went to museums in Italy and I found that all concessions at Italian museums extended to all nationals of the European Union.

(Mr MacGregor) I am sure they have to.

Michael Fabricant: They cannot differentiate within the EU for any charge.

Mr Bryant: Well, the Louvre and the Prado both do.

Michael Fabricant: We stick to the rules and nobody else does.

Chairman: That is because we are British!

Mr Doran

Congratulations from me also on your appointment. I would like to look a little more closely at the financial arrangements. You listed a long legacy which you inherited and you made a comment about the Treasury in that you felt they had been unduly harsh in the way they had dealt with your particular problems.

(Mr MacGregor) I was commenting on Mr Fabricant=s quotation from the Treasury when it declared the Museum incompetent.

Michael Fabricant: And I agreed with you. Can I also congratulate you on your appointment.

Chairman: To get it out of the way, Mr MacGregor, we all congratulate you!

Mr Doran

In looking at the issues that you have raised, obviously the question of free admission is fairly high on the list of difficulties you have had to face and, looking at it from the outside, would you accept that you have been effectively punished by sticking to your principles on free admission?

(Mr MacGregor) Yes, there is no question. The long running absurdity that free museums had to pay VAT has meant that the Museum has lost somewhere between ,750,000 and ,1 million a year over the last ten years. That is money that would of course have been spent on building; it would have been invested and could not be invested. The other area is of course the fact that those museums that have charged have been compensated for removing charges, but none of the free admissions were compensated at the time for having not charged. So, it does seem to us inequitable that there should be extra compensation now for those museums that have removed charges and not a similar uplift for all museums.

Effectively, sticking by your principles, you are losing about ,8 million a year on your own figures and you have lost ,100 million over the C

(Mr MacGregor) We did not quite say ,100 million but certainly we think somewhere around ,80 million.

Have you ever done a cost analysis of the benefits of the British Museum to the UK economy? I ask that because recently the Royal Shakespeare Company did it and they presented us with evidence to suggest that about 80 per cent of all the public funding they receive is returned in some way in taxes.

(Mr MacGregor) I do not think we have specifically. Clearly, the British Museum is one of the reasons constantly cited by foreigners coming to London. The role of the Museum and the standing of the Museum internationally is hard to exaggerate and I think the magnet effect that it has on visitors coming to Britain is huge.

(Ms Austwick) I would just confirm that, to my knowledge, we have not undertaken such a study but, if you look at other common institutions that have, for example the Tate when they were looking at developing the Tate Modern, they undertook an exercise to look at how attractive London would be to international tourism as a result of the arrival of the Tate Modern and I think that there the economic benefit was predicated as somewhere in the region of ,50 million per annum ongoing and I suspect that if we were to undertake a similar exercise - and perhaps we should - we would find that indeed that magnet effect is rather important.

It might help your case with the Treasury.

(Ms Austwick) Yes.

I do not understand fully the funding formula which applies to museums.

(Mr MacGregor) Nor do I!

Obviously you would like more money, but is there a formula, is there a process for determining what museums should receive which you would like to see instituted or are you happy with the present arrangements?

(Mr MacGregor) The present arrangement is, on the gentlest formulation, opaque but I think what we would like to see would be to have seriously costed programmes for further educational activities and especially for the regional activities. We have a large number of regional partners; we want to negotiate not just more frequent exhibitions but long-term deposits with other museums across the country. The cost of that internally is obviously considerable. We would like a basis where, having agreed this level of fundamental running costs, these extras are costed and funded, and the same with education. The work we do with schools - somewhere in the region of 200,000 children get taught every year; we have invested very heavily in websites particularly the ancient civilisations websites; and in adult education. We have invested in those areas and we would like to be able to put costing packages for specific funding.

Do the different departments of Government fund you for these separate elements?

(Mr MacGregor) No.

It is a straight grant from DCMS approved by the Treasury?

(Mr MacGregor) Yes.

Nothing from the GMTE, for example, for all that education?

(Mr MacGregor) Not specifically and it is something that we feel ought to be explored because we are a fundamental part of lifelong learning. For instance, the two websites on Mesopotamia and Egypt which have between them over two million visits a year were funded by the Japanese. We need more funding for that kind of activity.

When you say Afunded by the Japanese@, that is external funding/private funding/sponsorship, that sort of thing?

(Mr MacGregor) Yes and it is not always possible to repeat that but it is an essential part. Every child in the country should be able to use the British Museum=s collection and that costs money and that is what we are asking for.

If I summarise what you have said, basically the education aspect of the British Museum is not funded by the State.

(Mr MacGregor) Not entirely.

And you would like it to be.

(Mr MacGregor) Absolutely.

We are obviously moving to a system of devolution in this country; we have Scotland and Wales already and we have the RDAs operating and funding some museum activities in other parts of the country. Do you see any scope there? Is there any money you have raised in Scotland and Wales separately?

(Mr MacGregor) Not at the moment but that probably will be. We are in discussions, for instance, with Glasgow Museums regarding long-term operational arrangements involving collections and I would imagine that some of the funding which will enable that to proceed would have to come from Scotland.

That seems to be a development of the arrangements you already have with individual museums.

(Mr MacGregor) Yes, but I imagine that some of that funding would have to come from a devolved government.

One final question on funding. You have raised substantial sums of money privately. What scope do you have to improve that?

(Mr MacGregor) We have already raised sums. The ,65 million raised for the Great Court was the largest sum raised by any museum in Europe from private sources. We have very ambitious plans in Britain and around the world. We can certainly improve it but of course that is crucially dependent on general economic circumstances and it is always uncertain. We can aim to do better but, as you know, private funding is inherently and necessarily unstable.

One final parochial question from the North of Scotland. There is a great deal of pressure on museums these days to send back artefacts which have been collected from various parts of the world. What are the chance of the Lewis Chessmen going back home to Stornoway?

(Mr MacGregor) I would have to question the word Ahome@! As you know, they were not actually made in Stornoway as far as can tell; they were made somewhere but were found in Stornoway. Many of them are already in the National Museum in Edinburgh, as you know, and there is a programme of regular visits, not just to Lewis, which seems to me to be the ideal solution and we would be very happy to contribute.

That sounds like a fudged answer to me.

(Mr MacGregor) No. Some of those Chessmen will be seen regularly in Stornoway and we will take part in that.

Chairman: One matter that we will need to raise with the Secretary of State is the fact that of course the British Museum is not allowed to divest itself of exhibits that it possesses and, at the end of the last Parliament, the then Minster for the Arts promised, as a result of one of our inquiries, to pass legislation to make this possible and it has not been done yet.

Ms Shipley

You have spoken of Amemory of mankind@, Acollective memory of mankind@, Aoneness becoming apparent@ and the Assyrian connection as well. Also, 20 years or so ago, I wrote a book entitled London for Free and I wrote a book on museums across UK and Northern Ireland. So I do have views about this. I think our museums are a fantastic education tool. I have some problems with what you are saying regarding Amemories of mankind@ and so on and the way you are describing it, which I am sure is wrong, is that they lead to linear history, which is dangerous and I do not like that at all! I am sure you do not mean that. The regional funding has been a disappointment for people and the link-up between yourself and regional museums is an important one. How will this deficit in expectations - it is not actually a deficit in funding because the funding is actually compared to what it has had for a very long time, it is very good funding but it is a deficit in expectation big time - affect you?

(Mr MacGregor) First of all, the real value of funding has declined steadily over the last ten years, so I do not think the funding can be described as Agood funding@ in that sense and, no, linear history is not on the agenda, I can assure you.

It is when you say that this leads to this, leads to this, leads to this that I thought, >Gosh, no=.

(Mr MacGregor) I was speaking chronologically. The deficit in achievement will be quite simply our capacity to prepare material in every way to send it out of London. The requirements to do that are obviously threefold: we need to have conservation to make sure materials are in good condition; we need academic research to prepare the material that goes with it in order that it can be understood; and we usually provide, if it is wanted, some kind of teaching support so that the material that is out of London can speak to whichever local audience is wanted by the local consumer. There is an absolutely straight equivalence between the amount we can do and the funding we receive. If, at the moment, we are having to reduce our staff in the museum, if it is difficult to keep the galleries open for those who do come to London, then clearly we have less and less resource to continue with our UK-wide responsibilities.

I think the train of thought that Frank developed is one that had not occurred to me because I assumed that you are getting some education funding because you are undertaking education work very directly in that you are teaching schoolchildren. There are a number of levels of teaching but the straight way you are teaching schoolchildren, it seems to me that there is a big case to be made there for talking to the Secretary of State for Education about this as a committee because education through museums and galleries is a massive undertaking and increasingly so.

(Mr MacGregor) May I just interrupt you for a second. The school area is one but we also do a great deal of teaching with universities and that is an area which we would like to expand. It seems to us that since this Government are hoping to expand higher education, we are part of that as well. So, in any discussions with the Departments of Education, that goes through the whole range of education.

As it happens, I lectured the course on museums as mediators, so, yes, I am on board for that one as well. Your figures, since the other museums have gone free, have gone down and their figures have gone massively up with the complaints that people like myself are only going in for half-an-hour and, quite frankly, the V&A for half-an-hour is enough for me because I only actually want to look at one thing for half-an-hour and go out again. I was really pleased to know that the National Gallery stayed free because I want to wander through and I enjoy wandering through and stopping to look at one picture. So, when those galleries complain that they are getting those short multiple visits, I do not buy that one at all. In terms of your numbers dropping off, personally, I am quite pleased that they are dropping off because, as a regular visitor to your museum, it was getting to a point of crowd control and it was getting unpleasant - I do not want to go to the British Museum because it is too full. Have you any comments to make about that?

(Mr MacGregor) Firstly, I could not agree more. The only way to use collections as rich as this is by short visits. The proudest statistic that we had at the National Gallery was that one-third of our visitors came for just half-an-hour, which told us that we were doing a good job and I hope that the British Museum will reach that too, that people will drop in, look at a few things and then go back. The shift in visitor pattern I am sure will settle down. Clearly, lots of people went to visit museums that had charged because they were no longer charging and there is no doubt also that once people start visiting one museum, they go on to others. It seems to me that the growth of visitors to one museum is good news for us all. On certain days, crowd control is really a problem. We have tried to remedy that by extending opening hours. We have two late evenings a week and the access to Great Court is considerably greater than it was before. We would like to do that even more. It seems to be perfectly obvious that the way to reach the working population and to spread the visitors is to open in the evenings.

This is a terrible thought from somebody who is totally in favour of it being free, but is there an argument for saying that you should open every evening and that you should charge because they are working people and they can pay?

(Mr MacGregor) We effectively do that already with our friends one evening a month.

That is not a lot.

(Mr MacGregor) I do not know whether one could do it much more than that. We have already done that and we raise a great deal from our friends.

As a notion, is that viable: free during the day and then, when you get to the population in the evening, it is ,5?

(Mr MacGregor) It is certainly debatable. The point of free admission is a strategy to reach right across the public and I think a lot of the working public would still not come. Of course, you would get some people, but I think all the arguments about the short visit and the frequent visitor stumble against the ideal.

(Ms Austwick) I think there is also the argument there that for quite a number of working people who have relatively low wages price is an inhibitor.

Ms Shipley: It would be interesting to know if there is any research available to back that up. I would like to think you are right in that argument but I would like it also to be backed up.

Alan Keen

We on this Committee care probably more than the average MP about things like the British Museum, so we are on your side. I am sure we would all like to help justify getting more money. Can I just explore it a little further. Obviously we have to start from where we are at the moment, but how much space is there that could be used? You have a lot of collection which is never shown, do you not? What value is that? Is it worth paying more for that to be on display because you have a lot of space available, do you not? How much space do you have without spending more money on capital?

(Mr MacGregor) I think there are several categories of collection that need to be distinguished. Firstly, a great deal of it cannot be permanently on display for conservation reasons: works on paper, fabrics and whatever. The admission has to be a rotating display. That is one of the things that we would really like capital for, to re-use the British Library spaces to do that, and that could be greatly expanded. That was the great dream of the study centre in Oxford Street. There is another large area of material which is not in any sense any more display material than archives would be. If we had the finds of particular excavations with very large numbers of fragments, pottery or whatever, they must be available for scholars, they are not for public display. They can appropriately be stored off-site and they are, so that they are safe and available. The third possibility is those parts of the collection which are capable of permanent display and the quality of display which we would like more and more to show outside London where it does not dilute the study resource of the British Museum. So, there is a great deal we could so with the spaces vacated by the British Library if we had the resources to turn them into the right kind of display.

Presumably, if you start to use another large amount of space, then you will need more security people, lighting, heating and everything.

(Mr MacGregor) Exactly.

Are you talking about transferring stuff around the country permanently? Presumably if there is a museum that is only using three-quarters of its space, it still has that area covered for security purposes but they could take part of your collection without any additional cost.

(Mr MacGregor) We have a number of discussions ongoing at the moment; we are hoping to develop that. Clearly, we are in discussion with a number of regional museums about what kinds of collections they might like to have on long term because that seems to us to be an obvious way to go. Again, the cost implications of doing that are considerable.

I recall that the last time you came we spent quite a bit of time at the British Museum in discussion with directors of various departments and the Museum was talking about having some sort of music in the evenings in some of the spaces to attract the public in. Would you be able to charge for that? Would that be something you would be able to charge for? I made the suggestion at the time that maybe you should approach Cecil Sharpe House, the centre of traditional folk music. Presumably it was cost that stopped you from advancing in that direction? (Mr MacGregor) We have been trying to develop evening programmes exactly along the lines you were saying and we can certainly charge for quite a lot of them. There is no doubt about that. The difficulty at the moment is opening parts of museums and security because of course the museum has to be refigured to allow us to open easily particular sections and the security costs are considerable. Again, the capital investment would allow us to use the place much more effectively. You are quite right on the kind of programme that we want to develop.

Chairman

There was a fabulous concert in the forecourt; it was a wonderful event. I do not know what you would have done if it had rained!

(Mr MacGregor) We had a large public concert in the forecourt. We know that, if we organise these events, there is an enormous public for them. Obviously to organise them you need amazing resource.

Alan Keen

Have you been brave enough to go to Treasury and ask for money to enable you to carry on and say, AIf we spent this much more money@, just like a commercial company would say, AIf we invested this sort of money, this is what we would get for it@?

(Mr MacGregor) That is precisely what we are preparing. I am rather nervous about speaking in this way, but what we are proposing is exactly that kind of business plan because it is clearly the right argument that this investment would deliver these results, whether it is in education or regional policy or the use of the Museum and the rolling generation.

Mr Flook: First of all, I think it would be outrageous if working people had to pay to go to the Museum in the evening.

Ms Shipley: I did not suggest it.

Mr Flook: The hours that Members of Parliament work C

Ms Shipley: I did not suggest it.

Mr Flook

In response to Chris Bryant you said what I thought is a lovely phrase, Athe collective memory of mankind@. I notice that you are Chairman of the UNESCO Advisory Group of the Hermitage in St Petersburg. What pitfalls or lessons do you think you could learn from them and you might like to bring in that you are also a trustee of the Rijksvontrixic(?) of the Rijksmuseum in Amsterdam?.

(Mr MacGregor) If I can start with the Rijksmuseum because Amsterdam is a much clearer parallel. The director and staff of the Rijksmuseum would do anything towards free admission. They feel it is their major impediment to reaching the Dutch public more effectively than they do already and they regard that as the great achievement of the British Museum system. I think there is no greater way of reaching a regular local public. With the Hermitage, I think the great lesson is that the Russian Government have understood the key worth of the Hermitage in tourism, that one of the reasons people go to St Petersburg is because of the museum. They have invested very, very heavily in circumstances even more difficult than our own Government=s in the museum realising that the cultural patrimony of St Petersburg is why people go there and I think that is the lesson that we could usefully draw. People do not come to London for the weather or the transport system, they come for the culture.

To what extent do you think our Government recognise, to use another one of your phrases, that the British Museum is the world service for museums?

(Mr MacGregor) I do not know and that is the question you need to put to the Secretary of State. I think that like the World Service, it is unique and admired everywhere and I think that, like the World Service, the funding of it is always a matter of contention. We talked about other departments and I think it is worth pointing out that the Museum plays a very important part in diplomatic relations, so as well as the Department of Education and Skills, it would also be very proper for the Commonwealth Office to recognise what the Museum does. The Korean Governments, for instance, were given some extra funding to keep open each year, as you know. North and South Korea actually co-operated in presenting cultural developments here. Our relations with China and Afghanistan and the Middle East are absolutely crucial to their perception of Britain and I think that is something which should be mentioned.

Mr Flook: Mr Bryant mentioned Greece, but we do not wish to go there!

Miss Kirkbride

I think you have put together a very good case for protecting all of our inheritance and I suspect that my fellow Committee Members agree. I specifically wanted to ask you one question which is that I know that our present Government force you to produce sociological statistics in order to justify your funding and I am fascinated as to what pertinent questions you ask your visitors about who they are. What do you ask them?

(Mr MacGregor) We ask them the usual MORI questions about income and C

Income, your visitors?

(Ms Austwick) Twice a year we undertake a MORI survey of a sample of visitors.

So someone stands at the door and asks, AHow much do you earn?@

(Ms Austwick) Yes. This is standard practice of course in national museums.

What kind of response do you get to it? Are people quite relaxed?

(Mr MacGregor) Quite relaxed. On the whole, if people stop to answer anyway, then they have agreed to do it.

Michael Fabricant

Is there a note of how many people tell you to Aget stuffed@?

(Mr MacGregor) Sadly, no. We ask about the management categories and about the areas of work and then the Census categories are the categories we employ. Most people who tell us to Aget stuffed@ do not get asked the questions.

Miss Kirkbride

They are asked to put their occupation down and you then categorise them?

(Mr MacGregor) Yes.

Miss Kirkbride: Welcome to the nanny state!

Mr Thurso

It is very clear from your evidence this morning that the real critical issue is funding. Have you had a chance to digest the announcement made yesterday of ,70 million more cash for museums which, if you read the small print, it turns out to be more like ,40 million, and there is a small phrase which says, AAdditional funding will also go to the British Museum.@ Have you had a chance to find out what is in that and whether it is another drop in the ocean or whether it is actually something very significant?

(Mr MacGregor) I think the straight answer is that there is not really very much to digest, I am afraid, for the British Museum. The increase obviously is welcome. It is a very modest increase. It is hard to know what rate of inflation the Department is projecting inside those increases - and it is stated as I have seen - and the extra figure for year three, again the crucial thing is what the rate of inflation is going to be. It certainly does not appear to take account of the extra allocations of Treasure Act or of the projects we would like to achieve in education and regional policy.

So it would be fair to say that the rather self-congratulatory tone of the department announcement is misplaced?

(Mr MacGregor) We all do put the best gloss we can on what we do! There is extra money and that is obviously very good news. I think it would be churlish to say that it is not good news and it would be churlish to deny that there is extra money. However, I do not think it allows us to deliver to the public the museum they deserve.

So it is still inadequate?

(Mr MacGregor) Yes.

Chairman: Thank you very much indeed. That was most helpful and interesting.

Sir Neil, I would like to welcome you and your colleagues to this opening sitting of this inquiry. If you have an opening statement that you would like to make, we would be glad to listen to it.

(Sir Neil Chalmers) Thank you for giving us the opportunity to speak to you. If I may just summarise a few points that we have made in our written submission to you. Firstly, we are very keen to show the kind of organisation we are. We are very well known as a museum as a place to which people come to visit our exhibitions and to bring their school parties, which is an exceedingly important part of our work. In addition and what is not so well known is that we are also a major scientific research institution, basing our scientific research upon the collections that we hold and this is an extraordinarily important part of our work. It makes us one of the leading two or three natural history museums of the world. It is that dual nature which gives the Natural History Museum a very special quality. We believe that we are a well-organised and successful museum. We work around the world in our scientific capacity; we have visitors from around the world in terms of being a visitor attraction. As we make clear in our submission, we generate income from many sources, the most important of which and the biggest of which is our grant in aid. Admission charging in the past has been a major additional source of income. That has now gone and been replaced by additional grant in aid, but we also raise money from a number of other sources, not just sponsorship and trusts and foundations but also through a whole range of business activities and activities upon our scientific work which brings in commissioned research and other forms of income. Going free, which is what we did last December completely, was an important change for us. Its effects have been complicated and I think it is important to emphasise that we are in a dynamic situation. We do not expect the situation to settle down for some time for a whole set of reasons. In the months leading up to the time when we went free, people were clearly hedging their bets and they were waiting until we went free so that they could come. We also had the complicating effects of 11 September which changed the whole pattern of visitorship to London and therefore to our museum. So, we believe that we are going to have to wait some months yet before we get a stable picture as to what the effects are going to be. We are already collecting data, we are clearly getting a large increase in visitor numbers, though visits are shorter, to reflect some of the conversation that we heard earlier today, and the amount that visitors spend as they visit us per visit has gone down. So there is a balance between increased number of people coming and the amount they spend per individual. I would echo many of the things that Neil MacGregor said to you. We - and I think it is true of all the national museums - need more resources. It is as simple as that. We can do a lot to run ourselves efficiently and effectively. We can see - and it is frustrating - how much more we could do for the nation with relatively modest increases in income. That is, I think, the major message that we keep on making to our ministers and our officials and that we shall keep on making in the future. We also mention in our submission - and this may or may not be essential to your own interests - that we believe that the time has come for a new kind of relationship with the Department. The actual administrative arrangement that we have with them is, I believe, somewhat clumsy, not always clear, not always to the benefit of museums and therefore not always to the benefit of the nation. Thank you very much.

Obviously I understand your wish for greater funding but it is interesting, looking at the figures that have been put out by the Department, that you are now the best funded of all of the directly funded museums, that you received a considerably better settlement than the British Museum and indeed that you, in this financial year, have overtaken the British Museum in the amount of funding that you receive. Can you explain to us, taking into account that you would understandably like more, what arguments you put to the Department that have resulted in this?

(Sir Neil Chalmers) The arguments are that we have a very major job to do to preserve our collections - we have some 70 million objects in our collections and that is an extraordinarily large number of objects to be responsible for. We have a huge audience to be delivering the benefits of our Museum to, the people of this country and indeed the people worldwide, because, as I mentioned, we use our collection as a scientific resource to help improve the environment, to help improve people=s health and a whole range of other direct benefits. We make those arguments and we make them consistently and we show that we use the resources wisely and very carefully. I cannot read inside the minds of Ministers, so I cannot say how they actually judge our arguments and how they weigh those against the arguments they hear, I am sure very well put, from other museums, but those are the kinds of arguments that we put to them.

Ms Shipley

Are you one of the museums that has complained about multiple short visits?

(Sir Neil Chalmers) We have not complained about short visits. We have noted that the average visitor time has gone down from about two and a half hours to just under two. We accept this as a fact. We do not complain about it. I should say that the behaviour of visitors when they come to a museum such as the Natural History Museum is somewhat different from their behaviour if they go to an art-based gallery. That is due to the nature of the objects on display. If I go to the National Gallery or to the British Museum, I am going to see something quite specific, and I say, AThat is something which I have come to admire and enjoy.@ Maybe it is there for the first time; maybe it is there as a continuing part of their collections. We have found that, with our visitors, a great many of whom are families with younger children, they will come for a day out, and they will want to explore an area - maybe the Dinosaur Exhibition, maybe the Hall of Human Biology, or it may be one of a number of other major exhibitions - and they see this as a social experience, where they enjoy the whole set of objects and messages that we are putting across to them about an exhibition.

So it is a good thing then that people come for a shorter time?

(Sir Neil Chalmers) I think it is too early to say whether it is good or bad. I want people to stay in the museum as long as they are happy for.

You have described free admission as a blunt instrument. Why?

(Sir Neil Chalmers) Because I think that it enables more people to come. People come more often. Again, it is early days in terms of figures showing what percentage of people are making repeat visits. The information that we have thus far indicates that we are not actually changing the social spectrum of visitors who come to the museum; it is very much the same kind of visitors as before but coming more often.

Does that mean you were not doing your job very well before, because you had not got a wider spectrum, or that you did incredibly well because you have kept the same people but they are coming back more?

(Sir Neil Chalmers) I would like to think it is because we were doing a good job, but I think it shows that the toughest job of all with museums is to target and successfully attract visitors who would not normally think of going to a museum.

Clearly, you did not manage to do that when you had to pay to go in.

(Sir Neil Chalmers) I think we managed as successfully as any other national museum. If you look at the spectrum - and Sharon Ament could give you the actual social mix, if you like - we have a very good mix. What I am saying is going free is not the instrument to broaden social diversity.

So going free or charging has no impact at all. It is what you are doing in your outreach and how you manage yourself that is the important thing.

(Sir Neil Chalmers) I think it is very much how we interact with and reach particular segments of the community.

I come from the West Midlands. How do you reach people in the West Midlands?

(Sir Neil Chalmers) At the moment we have exhibitions which travel around the country.

Where do they go in the West Midlands?

(Sir Neil Chalmers) I cannot answer that straight off. We have the Wildlife Photographer of the Year, for example, which goes to venues throughout the country.

You see, I think you should be able to answer that. It is not a trick question. The West Midlands is a big area, and the fact that you, in your senior position, cannot answer what is a very wide-ranging question I think shows up a very real problem in what you are doing, frankly. Do you accept that criticism?

(Sir Neil Chalmers) No, I do not, because we lend our objects and our exhibitions to literally scores of galleries and museums, and to other venues such as shopping malls and other centres throughout the land, and the fact that I cannot, unprepared, answer your specific question of what location we have sent them to in the West Midlands...

I am being very general. I am saying any part of the West Midlands with anything that you have done, and you, at the top, cannot answer that. I find that very disturbing. I actually go to the Natural History Museum quite often, and I would be very aware if something was coming to the West Midlands. I should have expected you to be made aware because you would be in contact with somebody like the West Midlands MP. I certainly know of other galleries when they are doing that sort of thing. I think there is a problem here with how you are actually interfacing with the public. Also, on the scientific resource, your collection is a scientific resource, but as a museum operating, the public trot round and look at dinosaurs and things - and I love it; I do not knock it, but we do not really get the science. I read the labels. They are aimed at 13 years and below as far as I can see. That is accessing science for 13 years and below, but in terms of national major science institution, behind the scenes how are you communicating?

(Sir Neil Chalmers) I would invite you to come to the Darwin Centre, which the Queen opened yesterday. That is a major answer to that very question. It is the first phase of a two-phase project. I believe it is a major way forward of opening the museums of science to the public. The result will be, when the second phase is completed, that we will have moved from having less than one per cent of our objects on show to some 80 per cent. We have the opportunity now, every day, seven days a week, for our scientists to come out into a display area where they can give demonstrations about their collections. We talk about them as involvement. It is not a lecture; it is a discussion about issues of the day. They are aimed at an audience which is more adult than the typical young child audience, which we find a lot of, I am glad to say, in our major galleries. We also have behind-the-scenes guided tours.

As it happens, I went to the Darwin Exhibition and was amazed at how small it was for the amount of money that has been spent on that phase. I did listen to a scientist talking, and he was extremely good. He was addressing mainly adults and he was addressing us like 13-year olds. He said, Ahow many of you know London? Under your feet there is this.@ It was exactly like talking to 13-year olds. He was very good, but he was targeting 13-year olds. I was not getting any sense of real science here; I was getting a sense of populist - and believe me, I have written this stuff so I know it - skating over the edge, enthusing people. That is all very good, but not heavyweight science.

(Sir Neil Chalmers) I have been to some ten or a dozen of those presentations since the Darwin Centre opened, and I would simply say I disagree with you and I would ask you to come back again and to get a wider range.

Mr Doran

The Chairman has made the point that you did comparatively well out of this funding round, but in your submission to us you did express some concerns about the process which has led us here, and in particular you make the point that there is no formal bidding process and no formula for considering performance. Could you expand a little on that? I am interested to know exactly how you would see the ideal.

(Sir Neil Chalmers) This picks up on a comment that Neil made a few minutes ago when he said the process was opaque. We write what we think is a very clear statement of what our future funding needs are for the museum, setting out what our major needs are and how we are fulfilling government objectives in terms of the funding agreement that currently exists. What emerges is a very short letter saying, AWe are now going to give you a sum of money.@ That will be a grant-in-aid, and there is sometimes, as there was in a letter my Chairman received yesterday, some additional money - some very welcome additional money - for specific projects. There is no understanding at all of how those figures were reached, and what weight, if any, was placed upon the arguments we put to the Department. I would like to see at least the beginnings of a dialogue in that direction, so that we know that our arguments are being taken note of and agreed with or disagreed with. That would at least be a beginning.

Is that the way it has always been?

(Sir Neil Chalmers) I think it is fair to say yes. I have been the Director of the museum for 14 years now and that is exactly how it has gone.

You make a case and are handed some money. In some years it may just be the normal percentage increase that everybody gets and in some you might get a little bit more or a little bit less, but you do not know what you are doing right and what you are doing wrong, in a strict financial sense.

(Sir Neil Chalmers) No. We have an annual meeting with officials, who go through our funding agreement and they compare what we said we would do in terms of targets with what we have actually achieved, and we do not know how the outcome of that meeting is then fed into the funding allocation that is made.

In a situation where you have a special project which may require more funding - a major extension or something of that sort, not an exhibition, or a major repair to the gallery - is there a process for making separate bids on these issues alone?

(Sir Neil Chalmers) There is not a process. We certainly put in special bids, but we take the initiative ourselves. Sometimes those are successful, I am glad to say. I can give an example. We had a problem with one particular building, the Palaeontology Building, and those of you who know the Natural History Museum will recognise it as the rather modern, concrete building on the corner of Cromwell Road and Exhibition Road - not everybody=s favourite building. It had major design defects, which were not of the museum=s making; it was designed and built by the Property Services Agency. Those design defects became apparent, and there was a very large bill attached to their remedy, so we went to the Department some four years ago and made the case, and I am very pleased to say that the then Secretary of State, Chris Smith, gave us some additional funding to help us remedy that. There is not a process; you just go and make your case.

There is no process whereby you sit down with the Department and they set out targets for you and you set out long-term development plans of how you see the museum developing and you reach a formula which will enable that to happen?

(Sir Neil Chalmers) It does not happen like that. In fact, we have moved away from that somewhat. Funding agreements have become very much the dominant way of having a dialogue with government, and they do not take account of long-term perspectives, where you are trying to go with your museum.

What are your targets? How do you measure each year whether you are succeeding or not? You have the straight figures of people coming to the museum, but what else do you have?

(Sir Neil Chalmers) The things that are easy to measure are things of just that sort: how many visitors you get, what section of the community they come from. You can also, on the scientific side, say how much research is going on, or how many peer review research papers you publish. What you do not get is the qualitative information, which is crucial to running a museum successfully, because you want people to be satisfied, inspired, enthused. We want our science to be of great benefit to people, and we want it to have a long-term impact in the scientific community. It is those things which are much more difficult.

You also made a point about your inability to borrow. I presume that is common to all the museums we are discussing.

(Sir Neil Chalmers) It is indeed.

How would you see that changing if you had the opportunity to persuade ministers?

(Sir Neil Chalmers) If I may, I will defer to my Director of Finance, who I think can give a more detailed response than I could.

(Mr Greenwood) One of the continuous problems that we have is trying to allocate scarce cash in annual and triennial budgeting rounds. We are in a situation where we are trying to determine the most appropriate use of that particular cash for a return. If one were just looking at a normal business, of course, one could do it on net return, profit, etc, classic investment models, but when one is investing in, let us say, scientific equipment or a gallery, it is more difficult to actually ascertain what the direct return will be and the qualitative aspects that we were talking about. One has that constant conflict between trying to, say, invest in income-generating activities, where one can plough back the profit into the business, as opposed to investing in other areas of museum core activity. If one were able to borrow, for example, say, on income-generating activities, one could ring-fence those particular activities and go to a bank and say, AHere we have a good business case. Does it stack up? Are you prepared to lend on the basis that there will be a return in future years that can pay off the loan?@ or whatever. That is what the freedom to borrow could actually do.

Until we can reach a situation where you can do that, there will be no PFI projects in any of our museums?

(Mr Greenwood) We are looking for PFI projects at the moment. We are looking there more in terms of large-scale developments rather than specific, small-scale income-generating activities.

Where is the restriction? Is that government-imposed or is it part of your constitution?

(Sir Neil Chalmers) It is not part of our constitution. As the British Museum, our powers are defined by the British Museum Act 1963. They are identical. It is defined by government accounting.

Mr Flook

What impact do you think popular culture has had on your funding? I mean things like well-known films about dinosaurs, etc. How important has that been in the Government giving you more money than the British Museum?

(Sir Neil Chalmers) I have never noticed that to feature in our discussions with the Government, and I do not think it directly affects their attitude towards us. Certainly popular culture is important to us, I think in terms of short-terms peaks of interest. Sharon Ament may be able to give more direct figures but, for example, when Jurassic Park was first released on an unsuspecting world, we had, by good fortune rather than by good management, a few months earlier opened our dinosaur exhibition, so we had a second huge peak of visitors.

(Ms Ament) Last year in January we introduced a smelly T-rex, which came in at the point where Walking With Dinosaurs was very current, and we had 400,000 visitors come to that - and we were charging at the time. It is to do with popular exhibits recapturing the public=s imagination. It works, especially for families.

Leading on from that, I notice from the biographies which we were given beforehand that you manage a team of 150 people, which seemed quite a lot to me. Can you give the breakdown between communications, revenue generation and the business/commercial element?

(Ms Ament) We have restructured to bring together all of our communications. We see communications as one single activity, whether that is education in the most in-depth sense - so I manage the education team - right through to the people who develop exhibitions, the website, publications, and more traditional areas of communication such as PR, marketing, etc.

How many work there?

(Ms Ament) About 100 people all together. The other 57 or so work in business units. Business activities are devolved throughout the museum. Every area of the museum has a financial responsibility to generate income, whether that is through scientific grants, as Neil has indicated, or through retail and catering in the Visitor Operational Services Group. My group deals with generating non-visitor-related income, a nd that might be through running Conference and Events at the museum through to picture library sales through to touring exhibitions throughout the world. We tour exhibitions in 22 countries, and they get an additional 2 million visitors.

Do those tours in other countries make money for the museum?

(Ms Ament) Sometimes they do and sometimes they do not. It is a costly business.

So you are on risk in doing that.

(Ms Ament) Yes, but it performs a very important outreach objective for us as well.

Do all your business units make a profit, if you can measure them that way?

(Ms Ament) Most years they do.

(Mr Greenwood) That is what they are there for. They do make a profit, some better than others.

Which might be the best in terms of return, in the way you would measure it?

(Mr Greenwood) The best return is the Conference and Events business. You may be aware that we hold dinners in the Main Hall, for example. That is a very good earner.

I do not expect you to be precise, but how has that done in the last few quarters?

(Mr Greenwood) Last year was particularly difficult following September 11. This year the business will net approximately ,1 million.

Having worked in the City, one year we used the Natural History Museum for an event. We had walking dinosaurs terrifying people, which was quite amusing. Has the decline in the Stock Market affected you?

(Mr Greenwood) It certainly has. I do not know precisely, but certainly the last financial year was not its best year. It was not disastrous, by any means, but this year business has certainly picked up, particularly currently. We are doing very well in the run-up to Christmas, which is our peak period, as you might expect. The business did take a knock last year of the order of about ,100,000 off the bottom line, which is significant but does not put us in financial jeopardy.

Mr Bryant

This is not directly about your own museum, but the Natural History Museum in Oxford is, as I understand it, a university museum, and therefore not covered by the 1994 changes in VAT.

(Sir Neil Chalmers) I am not an expert on that. I think you are right.

I wonder whether you would support that extension to university museums, if it does not apply.

(Sir Neil Chalmers) I think so. It was an anomaly to have the situation that did obtain for many years, and I am glad it was corrected in relation to national museums and galleries. As I understand it, it does not affect local authority museums, so I think university museums are an extraordinary anomaly and I think it would be a good idea to put it right.

I agree. I was hoping you would say that. I think the Natural History Museum is a wonderful institution, and despite the fact that you deal with formaldehyde all day and every day, you do not seem to be dipped in it yourselves! There seems to be some strong commercial sense underlying a great deal of the work in which you are engaged. How important do you think that is in your work and across the whole of the museum world now?

(Sir Neil Chalmers) I think it is very important that we run ourselves in a business-like way. We are, after all, a big organisation, we are using a lot of public money, and we must be seen to be managing ourselves well and efficiently. We must also, because we do not have sufficient resources from government, maximise the amount of money we get from other sources. But - and it is a very big Abut@ - all of this must be utterly subservient to our overall goal, which is maintaining the collections and making them available to our audiences in this country and around the world as effectively as we possibly can. It is there as a necessary underpinning of what we are really trying to do.

What you seem particularly good at is enticing people into their own curiosity, if you see what I mean, whether it is through dinosaurs or seeing a head of a shark in a bottle or whatever, the little details that lift it above the ordinary level of just seeing something and not entering into it. Is there a process whereby you help people become zoologists and botanists and things like that as well?

(Sir Neil Chalmers) Yes, we go from attracting people who have no knowledge of the natural world at all and no interest in it, other than that they want a day out with their children somewhere safe and pleasant, and we want to be able to entice them in, to use your phrase, which I think is a good one, by capturing their attention to say, AYes, I would like to know more about that.@ From there, we can take them right through the entire academic, intellectual journey, through schools, through the primary education, secondary, education, lifelong learning. We do a great deal of teaching in universities at graduate level, at postgraduate level, and we even do post-doctorate training. We can cover things at every single level. One of the things we are most keen about, one of the things that defines our philosophy, is to look at our different users and say, AWhat do they need from us?@ and try and put ourselves in the position of our users. AHow is it that we can provide what they want?@

I note though that in the last three years children in school parties have fallen from 147,918 to 114,381, which is a drop of nearly 30 per cent.

(Sir Neil Chalmers) Yes. This is something we are concerned about. There are reasons, some of them external to the museum and some of them internal to the museum.

(Ms Ament) It is something we are focusing on very strongly. People are using the different resources the museum has to offer now in different ways. Website visits have taken off in a way which perhaps is different from the more formal school visits. Classes are using the website more. We definitely are focusing on addressing some of those issues, but it is part of a big restructuring of the museum.

I hear you have gone up to 4.7 million page impressions. That would not cover the 50,000 by the time a child has done 10 page impressions. This is quite a worrying trend.

(Ms Ament) It is a worry to us, and we need to do some more work on it.

(Sir Neil Chalmers) Some of this is due to the fact that we have changed the main education centre, which is in the basement. It is very attractive, but the throughput is slower; people are involved in lengthier investigations, so fewer people come through. Secondly, there is the ability of schools to send children on visits, which is, I am told, somewhat impaired through the budgets that are available to schools for extra-curricular visits. I am not an expert on that, but I think it is something which is worth exploring more.

You talk about extending your reach, which sounds a bit like the BBC talking about its share and its reach, but the other thing that the BBC and other organisations try to evaluate is their audience appreciation. Presumably you do some kind of MORI research or whatever on what people think about their experience of coming to the museum.

(Sir Neil Chalmers) Yes. Again, this is Sharon=s area. We regularly poll our visitors on our own account. We also take part in a collaborative poll through the Association of Leading Visitor Attractions, which is an interesting body which has as a criterion of membership that you have to have over a million visitors a year. It contains ourselves, the Canterbury Cathedral and Blackpool Tower, so it is a very diverse group. We get a number of visitor indicators from that.

(Ms Ament) We regularly receive in excess of 80 per cent excellent satisfaction from visitors.

The National Museum of Wales also has a Natural History element to it. I just wonder what cooperation you have with them.

(Sir Neil Chalmers) That is on several levels. We work on the science side, working with collections, sharing expertise. A lot of that goes on, not just with the National Museum of Wales but with the National Museum of Scotland, with the national museums and galleries on Merseyside and in Northern Ireland, and with many of the other larger museums.

Devolution has not produced any new problems in that regard?

(Sir Neil Chalmers) It could do. It depends very much how the Renaissance in the Regions implementation goes. That, of course, is confined principally to England in terms of building up hubs. We as a national museum wish to work closely with a number of leading museums in England which have major collections where we can help them work. There is a question of how you enable that network to work effectively with the big museums in Scotland, Northern Ireland and Wales, and I think that is a complexity that would not have existed without devolution.

John Thurso

My late father, when a child living in London, used to visit the museum regularly, but called it the Abony museum@ so in our family I am afraid you will for ever be the bony museum. You said earlier on that you had no understanding of how figures were reached by government in allocating funding. Can I explore your planning process, how you build your business plan and what the cycle is? Presumably you would begin yourselves by having a fairly clear objective, a vision even, reduced down to objectives, current action plan, and from that you would build both a reasonably long-term business plan and a short-term annual plan. I assume that is what you do.

(Sir Neil Chalmers) You have just précis=d exactly what I was going to say. Yes.

What are the sort of timescales you are planning on?

(Sir Neil Chalmers) We have set ourselves in terms of a vision a ten-year vision, which is from 2010, and we are clear what we want to have achieved by 2010 across the range of the museum=s activities in terms of the public experience, major exhibitions, the completion of the Darwin Centre, and creating a more adult experience for adults who want to come without their children in a calmer atmosphere in the upper floors of the museum and such like. We have a vision of where we want to go in our science, and particularly important and difficult is the development of our information technology. We then plan within the three-year period covered by the Spending Review allocation period. We have just received a letter from the Secretary of State, and we will between now and January do a lot of work on preparing the business case to put to our trustees based upon the allocations that we now know we shall receive and on the predictions of the income that we will have from our other sources. We will produce a worked-out business plan for a three-year period.

Therefore, in business terms, your major real plan, your three-year rolling plan, is actually driven by what you are going to get from the Government more than anything else.

(Sir Neil Chalmers) It is, yes.

That is the segment, following up from Frank Doran=s question, that you really have no debate on. You input, but there is no reciprocity; there is no discussion of the vision, there is no discussion of your objectives and how what you are given relates to that. Have I got that clear?

(Sir Neil Chalmers) I think that is true. It is interesting that four or five years ago I had a feeling that that sort of discussion took place more, because we used to have an annual meeting with officials where we did look at the long-term vision and related it more to the financial bid that we were making to DCMS, or its predecessor departments. Nowadays, as I said, it is very much more the funding agreement, what you are going to achieve in terms of targets, and much less about the long-term strategy. That is something we would want to have turned around so that we do put together both the achievement of targets and the long-term strategy, and have that dialogue.

It seems to me that, as parliamentarians, we should be in a dialogue with institutions such as yours to agree where you are going rather than forcing you to go where we agree to fund you. We have the thing the wrong way round to a certain extent.

(Sir Neil Chalmers) I think there is a very important point of principle there, and it is to do with exactly that. We as a museum are bound, as are the trustees, to fulfil the obligations put upon us by the British Museum Act, which says, AThis is what you are there for.@ The government of the day defines what it wishes to happen in terms of its own policy, and it is absolutely proper that it should so do, but what the government policy of the day might be does not always fit comfortably with the statutory obligations of the trustees. It is very interesting that in the letter that my Chairman received from the Secretary of State yesterday there was a very clear statement indeed of the four key objectives that she, the Secretary of State, has, which must be fulfilled by the grant-in-aid. I think that although one might agree entirely with the Government=s objectives, and say they are perfectly understandable and supportable, for the time being that could be the case, but there is a principle at stake, which is the one you have just alluded to. I think this is something that needs to be explored. In my written submission I said there are issues about the relationship that we need to have with the DCMS, and we should explore those so that we do have a mature, clear view. That to me is one of the most important things we have to look at.

Just to be clear, those four objectives, laudable as they may well be, are given to you; they come down like the Tablets with Moses. They are not actually anything you have asked for, and they may or may not fit.

(Sir Neil Chalmers) They are government objectives which are declared to us. There was a very big meeting in February of this year when the Secretary of State and the Minister for Arts, accompanied by the Permanent Secretary, held a meeting - in the Tower of London, as it happens - for all of the bodies in the various sectors sponsored by the DCMS and said, AThese are our priorities,@ and they were children, communities, economy and delivery, to read directly from the Secretary of State=s letter of yesterday. We therefore had to think very hard about how we were to respond to those.

Alan Keen

The last few statements you have made show that you feel you are not working in cohesion with the Department, that they are still driven more by budgets.

(Sir Neil Chalmers) I do not want to give the impression that we have an impossible or bad relationship with DCMS. That is not true. I think we work well with officials and with ministers, and we have a good relationship. I am saying it is susceptible of improvement. As I understand it - and this is what ministers and officials say to us - they have a clear task to persuade Treasury to give DCMS money which they can then use for their purposes, and clearly therefore DCMS have to use the arguments which are going to convince Treasury. As an institution that is going to work with DCMS to get the best benefit for ourselves, we would clearly want to have that sort of dialogue we have been talking about so that we can help the DCMS to make most effectively the case it puts to Treasury. What I would like to see is more of this dialogue, this discussion between ourselves and the DCMS about what we want to do as our core objectives, what the DCMS want to deliver, and how this translates into bids to Treasury and allocations to us.

Have you ever met anybody from the Treasury side? We hear that in this Government there is duplication of people involved in making decisions, both in Number 10 Downing Street, and at the Treasury and in the Department itself. Do you get that impression?

(Sir Neil Chalmers) I have met people from Treasury, to answer your first question. There was one particular issue that was exercising us a lot about six months ago, which was capital charging, and indeed, our museum together with two of the other nationals did a lot to try and get a resolution of a problem which would have been exceedingly difficult for us by working with DCMS and actually going to talk to Treasury direct. In the difficult negotiations that led up to going free and the whole issue of VAT, at one stage we did go and talk to Treasury as well direct. Whether there is duplication or not I am not in a position to say. I sometimes feel we are having a strange conversation with DCMS, because we are talking to them and then they are talking to Treasury, and I wish we could get round a table collectively more often.

It seems pretty obvious that in your case your buildings are full and the British Museum has a lot of space. Is that how it is?

(Sir Neil Chalmers) I will let the British Museum speak for themselves. Our building is full. It is full of visitors - it is half-term at the moment - and it is full of collections. We have a problem with expansion; we need more space.

Do you get together with other museums to discuss the tactics of looking forward and being positive to get more money?

(Sir Neil Chalmers) Yes. We have what is called the National Museums Directors= Conference, which has changed over the years from being a gentlemen=s talking shop - and I use those words carefully - to being a much more organised, effective, I am glad to say, male and female lobbying organisation, and a body that gets together and decides how it can best present its case to DCMS. I think that is an improvement.

Michael Fabricant

I am curious about the consequences of free admission to the museum. While I can understand that it would result in slightly less amount of time being spent per visitor, as you said, and I can also understand that this would result in a slightly less amount of money paid per visitor, a very curious thing in your written evidence is that the number of C2, Ds and Es as a proportion of your overall visitors has actually fallen. This would seem to be counter-intuitive. The whole raison d=être of free admission is to broaden access to those who might not normally come, either because they are deterred because of the content of the museum or primarily because of the cost. Why do you think that has happened?

(Sir Neil Chalmers) I do not know why there has been a drop, to tell you the truth, but I am not surprised that there has not been a major change in the social composition of visitors. Over the years we have argued that there has been evidence in a number of polls, most recently confirmed by the MORI poll that was publicised quite widely in the press, showing that the principal reasons why people come and do not come to museums are cultural rather than financial. There is of course a financial element, but if I may give a bit of background, our museum during the period it was charging also had extensive concessionary schemes and was free during a period every day. The result was that approximately a third of our visitors would come in paying the full charge, a third would come in on concessions and a third would come in free. So the opportunity was there for people to come in free if they chose.

Has it all been a political gimmick then?

(Sir Neil Chalmers) I do not think I would say it was a political gimmick; I would not use those words. I think it was a point of view of philosophy and belief. To my mind, the most compelling argument you could put for free admission is the one that Neil MacGregor put to you earlier, which is that you passionately believe it is right. I think - and this is a personal view - that the discussion that it would somehow increase access and so on clouded that fundamental issue. My view, and the view the museum has taken is that free admission as a principle is wonderful if you do not thereby so damage your museum in terms of starving it of resources that you impose other restrictions on access by having to close galleries or close the museum for a number of days a week or whatever. We would have had to have done that if we had not charged. We would not have been able to offer the services that we have offered, we would not have been able to refurbish all the major galleries in the museum, and we would not have been able to open the Darwin Centre without charging for admission.

Do you think there is a very real danger now that the quality of the museum will suffer?

(Sir Neil Chalmers) It will depend entirely upon whether the Government continues to compensate us for the revenue we have foregone. We have told the Government very clearly that if they do not continue to compensate us at a level that takes account of inflation and real visitor numbers, then we are not prepared to see our museum damaged by lack of funding.

Miss Kirkbride

You say you are not prepared to see the museum damaged; what action could you take? Are you able to unilaterally go back and charge visitors?

(Sir Neil Chalmers) It is for the trustees to make that decision, and they have declared very clearly to the Department that they will retain the right to make that decision if in their view the interests of the museum, and therefore of the country we serve, are best protected by doing so.

Chairman: Thank you very much indeed.

Memorandum submitted by Department for Culture, Media and Sport

Examination of Witnesses

RT HON TESSA JOWELL, a Member of the House, Secretary of State for Culture, Media and Sport; RT HON BARONESS BLACKSTONE, a Member of the House of Lords, Minister for Arts; and MR RICHARD HARTMAN, Head of Museums and Libraries Sponsoring Unit, examined.

Michael Fabricant

We were just having a very interesting discussion with the Natural History Museum, and I was asking them about the sort of people who visit, since their recent change to free admission. They were saying earlier on that, as one might expect, the amount of time spent per person has been reduced slightly since free admission - you would expect that - and the amount of money spent per person has reduced slightly - and that you would expect - but what one would not have expected is that the number of C2, Ds and Es coming along to the Natural History Museum has also reduced, and far from broadening, as one might have expected, the profile of people who visit the museum since free admission, it has in fact narrowed. I wonder whether you think this has almost destroyed the whole raison d=être of free admission.

(Tessa Jowell) Chairman, can I begin by introducing our colleague, Richard Hartman, who is the lead official in the Department, and say how pleased we are to be here on the day after we announced the funding settlement for the national museums and galleries to answer your questions. That is an important question. I was just checking the figures in my brief, and the Natural History Museum is the only one of our national museums and galleries which since free entry became universal at the beginning of December last year has seen a reduction in people from social class C2, D and E. You are absolutely right that this is a cause for concern. It does not appear to be the trend in other museums and galleries, where there has been an increase in the number of people from social class C2 and D and E attending. We are ten months into free entry, and clearly beginning to change the profile of the visiting population will take time, but obviously we will study carefully the figures in relation to the Natural History Museum. It links to the capacity for outreach work, for work in schools, building educational programmes, lifelong learning and so forth, in addition to simple practical issues of accessibility. I was at the Natural History Museum yesterday for the opening of the Darwin Centre, and it was fantastically exciting to see on the one hand such a large number of people from the very wide range of backgrounds and from all over the country - it is half-term so the visitor numbers were high - but also to celebrate the opening of a scientific resource which will lead the world in not just the capacity of its scientists but also the capacity of its facilities.

Just in relation to that, by the way, some historians feel that Charles Darwin got most of his ideas from his grandfather, Erasmus Darwin. I happen to live next door to the home of Erasmus Darwin, which this Committee has visited, and I hope you, Secretary of State, may come up not just to visit my home but also the home of Erasmus Darwin, which has an excellent museum in connection with that.

(Tessa Jowell) That would always be a pleasure, Chairman.

Can we move to the question of the British Museum. We know they have had their problems. They have a ,6 million cash deficit and so on. Are you aware that a spokesman in the Treasury, which, as you know, refused to assist the British Museum to a large degree, commented, AThe Treasury rewards excellence and not incompetence.@ Do you think that the British Museum has been incompetent?

(Tessa Jowell) No, I do not think the British Museum has been incompetent. I think that the new regime at the British Museum, as no doubt you have already heard this morning, is a source of very great confidence. I think there certainly have been difficulties in the past that the museum has faced, in part due to the greater than anticipated costs of the Great Court development and the impact on visitor numbers at the museum and the dramatic reduction in American visitors particularly after September 11. The British Museum is unique among our museums and galleries as being one which has more visitors from outside the UK than from the UK, so it has undoubtedly been hard-hit by that. That said - and Tessa Blackstone may want to add to this - there are very clearly areas in which the operation of the British Museum needs reform: staffing numbers, working practices, and ensuring that the deficit that might arise were the British Museum to continue spending at its present rate until the end of this Settlement Round should not arise. We have made an allocation as part of the settlement that we announced yesterday in order to deal with the threat of their having to close the Korean Galleries, and we hope that that problem has now been settled. They have substantial capital receipts that I know the Director and the Chairman intend to use to fund the restructuring of the staffing of the museum but also to undertake other aspects of modernisation.

Are you sure about that last point? As I understand it, the sale of the capital items that they own, including this place in New Oxford Street, can only be used for capital expenditure and not resource expenditure. If that is the case, that will not assist in the point that you just made, the question of staffing.

(Tessa Jowell) Yes, but they will be able to re-profile some of their self-generated income.

Could you clarify that?

(Mr Hartman) The British Museum will be able to re-profile some of its self-generated income in order to pay for the reform.

Through capital expenditure?

(Mr Hartman) Yes. It will be able to use the capital for purposes which it would otherwise have used self-generated income, so thus it will be able to divert the self-generated income into paying for the reforms.

Would you welcome greater flexibility? Would you welcome a possibility, I believe recommended by this Committee - not that I am going to suggest the sale of the family silver - of the ability for museums - not just the British Museum but other museums - to have a greater transfer between capital and resource expenditure, sometimes by selling off capital items, not necessarily exhibits, and using it not just to re-invest, re-profile, but maybe to use it as resource expenditure in the short term, as businesses do?

(Tessa Jowell) As you will have heard from the British Museum this morning, they do need the flexibility in order to be able to restructure, and the plans for that restructuring I think are well defined. Neil MacGregor, as the new Director of the museum, has already embarked on the first stage of that programme. Yes, I think museums and galleries should earn maximum flexibility on the basis of the evidence of their competence and their performance.

Mr Doran

Can I continue with the British Museum, because there is a certain sense in their submission and the evidence we heard this morning that by sticking to their principles of free entry, first of all they lost quite a substantial sum of money - they estimate as much as ,100 million in various elements that have been affected - but also they are getting no help now, as are the other museums that charge. So they effectively feel as though they are being punished for sticking by their principles. How do you respond to that charge?

(Tessa Jowell) I know that it is an argument that they often make, but I do not think that it is a fair charge, and the British Museum have been compensated and have seen an increase in their baseline.

In terms of the loss it is a relatively modest increase.

(Tessa Jowell) In 1999-2000 they saw an increase of ,1 million in their baseline in recognition of the costs of increased visitor numbers arising, and secondly they also qualified for the first time for the VAT rebate, which is estimated to be worth about ,750,000 to them.

As against the ,8 million that they would have received if they had charged.

(Tessa Jowell) The other museums that previously charged and then went free were compensated for the income that they had lost by charging, so in effect they either get the income from charges or they got it from the compensation package, so they did not make a profit from having been previously charging museums that then went free. I know this is an argument that the British Museum regularly make, but I do not think it is an argument which is actually sustained in practice. The source of their financial pain really has been the impact of the drop in visitor numbers since September 11.

(Baroness Blackstone) I would simply add that the trustees and indeed the previous directors of the British Museum have always wanted to be free, and have always been committed to being free, and they have always run themselves on that basis. I would like to add, coming back to Michael Fabricant=s question, that the British Museum does need to modernise, and I think that the new Director and the new Chairman recognise that, and they are doing it. Just to add one area where this modernisation is taking place, which Tessa did not mention, they are looking at their governance, and they are coming up with a new structure which will, I think, make them more efficient and better run.

Can I move on to the general question of funding. I am sure as ministers you will always get complaints that there is not enough money, and of course, we understand that, but I am interested in the process. We have had fairly clear evidence today that the process seems to lack transparency, is fairly opaque. There are clearly discussions between ministers and trustees and officials of the various museums, but there does not seem to be any clear sense of a long-term strategy; there does not seem to be any clear sense that there are targets. I understand that there are political targets, and I separate these out from the running of the enterprise. It is quite clear how important these institutions are, not just culturally but to the UK economy generally, and there is a sense that when the awards are made, as yesterday=s was made, there is no sense of what is in the Department=s mind, what has resulted in the level of the awards that have been made, how the museums have achieved what they have achieved or failed to achieve what they wanted to achieve.

(Tessa Jowell) I do not accept that that is fair. The settlement that we announced yesterday represented the second stage of reversing the long-term trend in the decline in funding for regional and functional museums, and the museums are now set. Remember, in government financial planning you plan on a three-year cycle. We plan everything on a three-year cycle, and national museums and galleries funding is no different from that. What most of them had yesterday was the three-year funding profile, a real terms increase of 1.5 per cent in 2004-05, and a real terms increase of 2.5 per cent in 2005-06. The level of capital that is allocated will of course vary, and that will depend on their needs. There are three principles that guided both the amount and the allocations: first of all, what museums needed; secondly, safeguarding the policy of free access; and thirdly, ensuring that the core requirements of the museums and galleries were met. Reaching that settlement was the result of quite a lot of discussion over the last months with them and obviously negotiation with the Public Expenditure Committee, negotiation with the Treasury and also negotiation with the Department for Education and Skills because we see the potential for growth in the educational role of museums and galleries as one where further resources will become available to them.

From the Department or from the DfES?

(Tessa Jowell) From both sources. If I can just take your question in two parts. There will be further money available to them, both to support partnerships between the national museums and galleries and the regional museums. I think you may have heard a little bit from the British Museum about some of their very exciting ideas in this area. Secondly there will be more money available from a joint pot which the Department has with DfES as part of the enrichment programme for children in school.

How will that money be accessed?

(Tessa Jowell) We are working on that. The extent to which it is accessed through resource, the extent to which it is accessed directly from the Department, is the detailed element of the settlement that we are working on still. We have settled on the broad indicative figures, we have to settle now on how the money will be allocated and specifically for what purposes that it is going to be allocated. As you know the regional museums and galleries will be engaged in a programme of quite radical modernisation as part of Renaissance in the Regions over the next three years.

Chairman

Did Lady Blackstone want to add something?

(Baroness Blackstone) What I would like to do is just to add to what Tessa has said and respond quite robustly to the questions you have asked us where you have been quite straight forward in suggesting that we do not have a long term strategy, we do not have a clear view as to where we should go with the museums and galleries.

Mr Doran

I am not suggesting it is not transparent.

(Baroness Blackstone) I think we are absolutely clear. First of all they are very important to the UK economy because cultural tourism is very important to the UK economy and becoming more important. Also I think they are very important from the point of view of UK culture. They embody a great deal about our history and the nature of our community and as such they should be cherished and protected and that is what we are doing. Basically what we have done is to stop the rot that had set in in the first half of the 1990s when there was a 15 per cent real terms decrease in their funding over a period of five or six years. In the last Government we put in then a 17 per cent increase. We are sustaining that increase. The funding is in the museum and galleries= base line. We have been able in the spending review which has just been agreed - and our announcement yesterday - to give a further increase on top of that which will allow the museums to do the scholarship and the conservation that they have to do to sustain these great collections. It will allow them to run good educational programmes and there is funding to sustain free access which we believe is important so everybody can see our great national collections which belong to the people.

(Tessa Jowell) Could I just add one final postscript to this which is the relationship between the Department and the museums and galleries which I think we all feel at the moment is overly prescriptive. We are in the process of negotiating with museums and galleries greater flexibility, greater freedom on the basis of the evidence of their performance. This is part of what we call the touchstone programme which is the modernisation programme for the relationship between my Department and the range of non departmental public bodies which include museums and galleries.

Mr Bryant: For my mind the free admissions policy has been one of the most successful things that the Government has done, not just here in England but also in Wales. I think it has seen a significant expansion in the number of people who have gone to museums and even if that is the same people going four times rather than going once I think that is a good thing. The more people who have access to the great cultural exhibits of the world, that can only be a good thing. My experience in Wales - and I do not ask you to answer on behalf of Wales, as it were, but I wonder if the same is true of museums that you work with - is that the national museums have seen a significant increase but where they are in direct competition with other museums which are not national museums there can then be a significant income problem for those other museums. In my own case the Rhondda Heritage Museum is a local authority run museum, it is in direct competition with the Big Pit which is a national museum Wales. They are almost identical and what has happened is there has been a migration from one to the other. Is that a problem in England?

Miss Kirkbride

Yes.

(Tessa Jowell) Yes, I think it is a problem and that is in part why Renaissance in the Regions is such an important programme. There are different regimes. There are local authority museums which are free. There are some local authority museums which charge. There is an inconsistent regime and there are inconsistent levels of funding. But Renaissance in the Regions with the money that we announced yesterday will fund a restructuring of those museums. As I have referred to also we have allocated money which will be available for partnerships between the national museums and regional museums in order to develop more collaboration, particularly through sharing of people skills, sharing of collections and so forth. Yes, regional museums have been very run down. For all of the view which may prevail that the money that we have secured for Renaissance in the Regions is not enough just remember that before the new ,10 million came on stream at the beginning of this financial year something like ,2 million a year was spent by my Department on all the regional museums. That is set to increase cumulatively by ,70 million over the period of the next spending round.

Mr Bryant

Can I ask a tiny question which is about university museums and whether it is not the time now that we do away with the anomaly regarding the 1994 VAT amendment?

(Baroness Blackstone) When we announced free access to the national museums and galleries it was made absolutely clear that there would have to be some ring fencing around those national collections and that it would not be possible to afford to provide for the university museums the same change in their VAT regime that had been provided for the previously free national museums. I think of course there is a case for this extension but I think that it does raise a lot of issues in terms of how the VAT regime is applied which I think the Treasury would argue are very difficult to deal with in relation to EU rules. So I think that there are problems in this particular area.

Chairman: Could I just say Lady Blackstone is being particularly diplomatic about this because the problem is with the Treasury. Tony Lloyd and I went to see the Chief Secretary about this because of the anomalies relating to university museums in Manchester. All governments, particularly in Treasury, are terrified of what they call repercussive effects and that is why they have slammed the drawbridge up on this one.

Mr Bryant: Can you slam a drawbridge up?

Chairman: You can indeed.

Mr Bryant: Do not do it on me now, Chairman, because I have got another very important question.

Chairman: All your questions are important.

Mr Bryant: No, that is not true, Chairman. Quite a lot of the national museums are in the posher places in Britain and some are not, such as the Imperial War Museum and the Geffrye Museum.

Michael Fabricant: That will lower house prices.

Mr Bryant

As somebody who used to be on the board of the Geffrye Museum, one of the constant problems was trying to make the Geffrye Museum - and I suspect also the Imperial War Museum - live within its own community. I wonder whether there is more we can do to enable those museums to do that, whether there is still further work about extending the other great museums which are in the posh places of Britain to enable them to diversify their work into the rest of Britain?

(Baroness Blackstone) First of all, the Geffrye Museum is a museum I happened to visit just about two weeks ago.

It is a cracking museum.

(Baroness Blackstone) I know it well because when I was Deputy Education Officer in the ILEA I had responsibility for both the Geffrye and the Horniman Museum in Lewisham. I think it does a fantastic job working its local community. It is mainly focussed on educational programmes for primary, particularly primary but also some secondary school children. Of course it could always do more but it has greatly extended its imprint. It has a fantastic new gallery and it has managed to raise money not just from Government but also from sponsors who have supported it. I think the same goes for the Imperial War Museum which again has worked very, very closely with its local community mainly through its educational programmes. What I think is terribly important is that all the national museums and galleries that have very substantial collections should work with those other museums and galleries which do not have (a) such big and valuable collections but (b) some of the other resources they have in terms of the skills of their staff. We would like to see far more collaborative programmes within the national museums and galleries sector but equally, and perhaps even more important, between the national museums and galleries and the regional and local museums and galleries. Indeed, some of the money that we are allocating during the spending round is going to be held back so that the national museums and galleries can work up new programmes working with the regions and lend their expertise as well as their collections.

Ms Shipley

Secretary of State, the Director of the Natural History Museum was extremely careful in his answering of questions about free entry and my impression was he was equivocal at best. Also he intimated that schools find it more difficult to do visits now but he could not actually substantiate why. Also he said that they do substantial regional outreach work. When I said AGive me an example in the West Midlands@ he could not actually think of one. The Natural History Museum did not know why it had a drop in C2, D and E visitors since free admission. The final sort of rider at the end of the questioning was that if basically you did not keep up funding the trustees may well instigate charging again. Now given that this is a sponsored museum, it is a national collection, what do you think about that?

(Tessa Jowell) Let me be absolutely clear about this. The settlement that the museums and galleries were told of yesterday, that we announced yesterday, is in part in order to maintain free access. There is a quid pro quo in that these are publicly funded bodies and the money that they get comes with strings attached and one of the strings is that they maintain free entry. That will be made very clear to them in the funding agreement that will be settled over the next few weeks. They are all absolutely clear about that.

Good. Would you say then, also, another strings is that these C2, D and E visitors have dropped only in the Natural History Museum? Is that something else that you will be saying: AThis should not be happening really, if the other museums can manage it, you can manage it@?

(Tessa Jowell) I think that this is something which we need to look very closely at. You will draw some conclusions obviously in your report on this. We will look at this also because investing as we have done in promoting free entry one of the very explicit aims of doing that is to increase the diversity of visitors to museums and galleries. I think we have got also to be clear that this does not simply happen by hoping that it will happen. You need to provide a structure for this greater participation and I think that the three programmes that I have referred to - firstly the scope for greater partnership between regional museums and national museums is one part of that, secondly that creative partnerships will extend to museums and galleries and there will be an instrumental link to schools which are covered by creative partnerships and thirdly the further pot of money that we will spend jointly with the Department for Education - are ways of providing structure.

Good.

(Tessa Jowell) We attach great importance to it and we will monitor the performance of museums and galleries in this area very carefully indeed.

Moving over to the British Museum. It does a lot of educational stuff but it does not get funding from the Education Department; should it?

(Tessa Jowell) I think again there will be scope for increasing the amount of money available to them for education subject to successful bids against the further streams of money that I have identified.

There is generalised education, people like me going in and being educated.

(Tessa Jowell) Exactly.

Then there is specific schools education for example or universities education. Would there be an argument that you could support which would say AThe Department for Education actually should be physically funding, very much related to education institutions, contributions to museums@?

(Tessa Jowell) The money which we will spend jointly with DfES is specifically in recognition of that, that museums have got a very important role to play in enriching the curriculum for children. I think that if you go to any of our national museums and you look at some of the exhibitions you will see that they are very specifically targeted at schools, targeted in imaginative ways at the different key stages of the curriculum. They are doing that and I think that through particularly the two schooling steps that I identified we will improve the structure through which that is delivered.

John Thurso

Can I preface my question by saying I do not think there is anybody in this room who would not associate themselves with Lady Blackstone=s remarks regarding the importance of our great institutions, particularly culturally but also as you mentioned with regard to tourism. There is a clear recognition that they were woefully underfunded for many years and there has been catch up. I think where we all part company is has the catch up been enough. What I would like to come back to is the question Frank Doran was putting in relation to the process. I would like, if I may, to be reasonably specific because if you get into the detail you begin to understand the thing better and that is with regard to the Natural History Museum. It might be that it is Mr Hartman who is best placed to answer this. What is the actual precise process by which you communicate with the Natural History Museum to receive whatever input they want to give you prior to funding being decided and what is the process by which you communicate? In other words, is this a dialogue, a negotiation, what happens?

(Mr Hartman) Yes, it is a dialogue. Essentially what happens is that, first of all, we write out to them and ask them to set out what they feel their position needs are because first of all when we are addressing core funding the issue is what are the needs of the institution, what are your priorities, so we ask them that. Then we take our discussions on from there essentially. Finally there are eventually discussions with ministers.

When those decisions have been made, what happens in communicating the whys and wherefores of the decisions? Presumably you do not tick every box or the minister decides certain boxes do not get ticks.

(Mr Hartman) Yes.

What is the process of decision and dialogue?

(Mr Hartman) Quite often we have a washing up session with each of our institutions, usually separate but at official level, to discuss the consequences of what this will mean for the longer term, whether there are going to be any further problems emerging, and just to generally get feedback which we report back then to our ministers.

(Baroness Blackstone) Could I just add to that very briefly that I did have a meeting with representatives of the National Museums and Galleries back in the summer to discuss with them our priorities, their priorities and get some feedback as to what they thought were the most important aspects of their programmes over the next three years where they believed they needed funding.

Why I wanted to find out your views of how you thought the process was working is that I asked very similar questions of Sir Neil Chalmers and his actual quote to me was that he had no understanding of how the figures were arrived at and gave further evidence that the Government=s objectives, the four objectives in the letter sent out yesterday, were highly laudable, absolutely correct, no argument about them, but there was not dialogue about how those fitted in to the ten year vision which the institution had or the rolling business plan. There seems to be a very clear lack of dialogue and communication, at least in perception if not in reality. Is that something that we can address because clearly one of the primary things Parliament can do is actually debate the vision so it can be agreed to prior to the resource being applied. It seems at the moment that the resource is made available and that drives the objectives that come from that rather than us all deciding AThese are our objectives, now when can we fund them@.

(Tessa Jowell) I think there are two or three points in relation to that. First of all these are our sponsor museums and galleries but as I said a few moments ago we set down the ground rules which govern our funding of them, in most cases funding comes also from other sources. So the museums and galleries have more resources available to them than just what the Government provides. The three conditions which I indicated are the terms of Government funding and then there is the process of monitoring against performance measures. Secondly, consistent with the safeguarding and delivery of those objectives, we are keen to minimise the amount of day to day control by my Department in the running of museums and galleries. The third point is that in Government we operate on a three year funding cycle, certainly where Lottery money is invested over and above mainstream Exchequer funding. Of course we engage with the trustees and with the executive staff in the longer term vision but I think it is important to remember that they are free to develop a longer term vision which is a freedom that extends beyond that having to be signed off in every detail by Government.

Alan Keen

I am very much in agreement with Frank and John Thurso. You have hopefully convinced me that we have moved far enough on from the one year funding. The three year rolling programme is a massive improvement, particularly for those who work in the private sector who were horrified by the Government sticking to that system for so many years. We have moved on. I do not think we are satisfied we have gone far enough. The new Government has not been in for more than five years so there is time to continue the improvement. Can I take a slight step further forward. Obviously there have to be experts in the Treasury, and we understand how it is in Number 10 as well, on culture, media and sport issues. How much duplication is there in experts? It is important that the Treasury does have somebody who understands the philosophy of museums and galleries. Do you meet on a constructive basis with people from Number 10 and the Treasury to discuss the overall strategy and philosophy of these things or are they all separate, being critics of each other. How does it work?

(Tessa Jowell) The recent spending round is perhaps the best example. There is a lot of dialogue between my Department and the Treasury and there has been a lot of dialogue over recent months as we have navigated our way, and other departments have to, to the settlement which the Chancellor announced in the summer. The expertise differs as you would expect in different departments. My Department has a number of people who are experts in the business of curation and the management of collections who are, if you like, the guardians and the advocates of the cultural case for investment in museums and galleries. We have also been working very closely with the Treasury on the case for reforming the administration of museums and the galleries in order to minimise the bureaucracy and red tape, to put it crudely, and maximise the earned autonomy of museums and galleries in the confidence that they are committed to and have the capacity to deliver the government objectives that they have been funded to deliver. There is a lot of dialogue and in the run up to the announcement of the spending round there was a lot of discussion about the broad level of funding that would be necessary in order to maintain the three essential core priorities that I outlined earlier. I think that there is an increasing understanding and commitment in my Department to value-for-money transparency and structuring the regime within museums and galleries in such a way that they have a commitment to the government's priorities and the capacity to deliver them.

Alan Keen: Thank you.

Miss Kirkbride

I was interested to hear the Secretary of State enjoyed her visit yesterday to the Darwin Centre and I wonder whether she wanted to reflect on the fact that that creation was possible, along with other new exciting exhibitions, at the National History Museum during a period when they did actually charge for some of the time for admission and that that growth was possibly due to the increase in income that that permitted?

(Tessa Jowell) The National History Museum and other national museums look to a range of different sponsorship. As I already indicated the income they lost through charging they have been compensated for. I think it is very important to be clear about that. They were compensated in the last spending round. This year ,29 million has been allocated in order to meet the cost of free entry, and that will continue. It one of the most successful policies. I think Chris Bryant said it is a policy that we are 100 per cent committed to continue. Yes, museums, like the National History Museum, have looked to the Lottery for funding, they have looked to private sponsorship and beyond that. I know that is a process in which they are now engaged in seeking to put together a funding package for the Darwin Centre phase two, 2.1 million capital in each year, and we have allocated and announced 2 million yesterday.

Have you had any discussion with the Treasury about allowing museums to borrow money?

(Tessa Jowell) We have not as part of this spending round, no.

Do you intend to? What is your view on this issue?

(Tessa Jowell) I think that it is important that we keep the overall spend for which government is responsible and which can be sustained by the trustees within a manageable and affordable cap. There is no intention to change the financial regime of museums and galleries so that they can borrow off balance sheet.

Looking at the British museums, whilst taking completely on board their need to reform, it was also put to us, and I think very relevantly, that they now have a great deal of extra space due to the British Library being removed and really if they are to be the trustees, not just of the nation=s heritage which is in that museum, which is the world's heritage, which is in that museum fortuitously as a result of Britain's past history, then it really needs to be able to have access to more capital to make that extra space work and actually in global terms to justify the collections that they have because, as you will be aware, there is a great deal of pressure on the United Kingdom to hand back some of its collections. How much does the government, with all due recognition of the need for reform of their working practice, see the need for extra capital if the British Museum is to justify its present position and it collections?

(Tessa Jowell) We have not made an additional capital allocation to the British Museum in view of the fact that they have just secured 35 million in capital receipt from the sale of the post office just off New Oxford Street. We expect them to begin manage their capital needs within what is a pretty substantial additional capital fund.

That is it then. There is zero for 2004 and 2005 and it will remain zero because of that?

(Tessa Jowell) We have no further capital resource from my Department's capital allocation available to them, no.

Going back on what you said about the Renaissance of the Regions, obviously it would be very nice to have more things displayed out and about in the country but presumably the public will have to pay to go and see them. Where they are not in the National Gallery but they are in a regional gallery belonging to the national collection you will still have to pay to enter those museums and there will be a resistance because of the anomaly that now exists between the national collections and other collections?

(Tessa Jowell) Not all of the national collections are in London, there are smaller galleries and museums ---

There are a lot of very good museums around the country who find it very hard to manage because they have competition from the national collection.

(Tessa Jowell) With the investment we announced yesterday they will be able to, (a) increase the range of their collection and (b) also be in a position to improve, in a number of cases, the quality and condition of their premises. There are significant numbers of regional museums that are not particularly appealing places to visit, which is why we were so keen to support the rationalisation and the hub of the satellite structure as a way of achieving that rationalisation that was proposed by the Renaissance in the Regions. You are absolutely right, there will be different charging regimes in different parts of the country.

Was there no consideration given to creating a mixed picture, as used to exist amongst the national galleries, whereby there is some free time and there is some paid time in the museums which presently do not benefit from being free altogether. There is a huge problem building up between those galleries that are free and those which are not which is depressing the opportunities of those which are not free, and because of the competition the government has created a very unfair market in the museum world by this decision?

(Tessa Jowell) I certainly do not see it like that. I do not think that the 60 per cent increase in visitor numbers reflects an unfair market.

For some!

(Tessa Jowell) People travel to London, they travel to the now free museums and galleries in Liverpool, in Salford and in Cornwall. Yes, there are different charging regimes and I would not want to raise hopes that in the short-term we are going to be in a position to do very much to change that. Chairman, certainly if the Committee makes proposals along the lines of those made by the Member for Bromsgrove -

We have a museum as well.

(Tessa Jowell) - we would look at those and would want resource as the body that will disperse this money to look at those proposals closely too.

Chairman: Thank you very much indeed. I think that everyone will agree this has been a most useful session. We are most grateful to you. Thank you.